Search found 2704 matches

by alex_686
Fri Jan 19, 2018 6:00 pm
Forum: Investing - Theory, News & General
Topic: Is placing the lowest ER fund in tax deferred always the way to go?
Replies: 4
Views: 224

Re: Is placing the lowest ER fund in tax deferred always the way to go?

If a US stock index fund has ER of 0.28%, bond fund of 0.32%, and international equity fund of 0.38%, does it really matter that much if the 0.28 or 0.32, or even 0.38 fund is placed in the 401K? Placing the higher ER bond fund in the 401k/403b is by definition not minimizing expenses, unless of co...
by alex_686
Fri Jan 19, 2018 4:57 pm
Forum: Investing - Help with Personal Investments
Topic: Quesiton about Bond Funds
Replies: 4
Views: 296

Re: Quesiton about Bond Funds

On the first, what you seeing is just a coincidence. The fund holds a large slug of corporate bonds which carry a higher rate. It also probably holds older bonds which may have been purchased at a discount or a premium. Very hard to untangle. Just sheer blind luck. Second, how many days ago were a f...
by alex_686
Fri Jan 19, 2018 2:59 pm
Forum: Investing - Help with Personal Investments
Topic: Are ETFs Really That Safe?
Replies: 26
Views: 1908

Re: Are ETFs Really That Safe?

So if an ETF needs to liquidate it can sell the underlying assets to everyone on the open market? ie not get held hostage or exploited by the handful of "authorized participants"? edit1: http://wallstreetonparade.com/2015/12/pull-back-the-curtain-on-exchange-traded-funds-and-out-pop-wall-street-meg...
by alex_686
Fri Jan 19, 2018 10:21 am
Forum: Investing - Help with Personal Investments
Topic: MEC's instead of Bonds?
Replies: 18
Views: 632

Re: MEC's instead of Bonds?

MECs, annuities, and other products aggressively sold by insurance companies are usually highly complex, opaque, and costly. "One Modified Endowment Contract (MEC) that I am looking at is a completely liquid instrument that can grow a maximum of 9% in a year if the S&P gains 10.5% or more and can o...
by alex_686
Thu Jan 18, 2018 6:03 pm
Forum: Investing - Help with Personal Investments
Topic: Are ETFs Really That Safe?
Replies: 26
Views: 1908

Re: Are ETFs Really That Safe?

I'm not sure how everyone has this much confidence in ETFs but I think the real answer is, we don't know. EFT's haven't been tested in extreme market volatility. It's right there in the prospectus next to the flag. So until a major crash happens and some of the "Creation Unit" banks go bankrupt, we...
by alex_686
Thu Jan 18, 2018 4:48 pm
Forum: Investing - Help with Personal Investments
Topic: Are ETFs Really That Safe?
Replies: 26
Views: 1908

Re: Are ETFs Really That Safe?

From a structural view point ETFs are exactly as safe as mutual funds. They fall under the same regulations and operate mostly the same. There is a difference on how shares are created and destroyed but there is nothing dangerous about that. Bogle's reference was not specific to ETFs but rather to i...
by alex_686
Thu Jan 18, 2018 3:28 pm
Forum: Investing - Help with Personal Investments
Topic: Dividends vs Capital Gains on Total Stock Market not reinvested
Replies: 4
Views: 381

Re: Dividends vs Capital Gains on Total Stock Market not reinvested

Mutual funds are required to distribute all income each year. If they revived dividends they need to distribute it as a ordinary income dividend. When the fund trade stocks - for example to rebalance the portfolio from people buying or selling shares - they need to distribute it as a capital gains d...
by alex_686
Thu Jan 18, 2018 3:19 pm
Forum: Investing - Help with Personal Investments
Topic: Lets talk about some favorite index funds?
Replies: 32
Views: 1446

Re: Lets talk about some favorite index funds?

To run a bit counter to everybody else, most index funds are excellent. First, which are the best index providers? S&P, CRSP, MSCI, Bloomberg, etc. are all very good. Second, which fund family provides the best index funds from the above index providers? I mean, almost everybody licenses the S&P 500...
by alex_686
Wed Jan 17, 2018 8:40 pm
Forum: Investing - Help with Personal Investments
Topic: Is a Stable Value fund just a Variable Annuity?
Replies: 25
Views: 1493

Re: Is a Stable Value fund just a Variable Annuity?

It's not any sort of annuity as far as I know. I'm just going based on some googling, which turned up Fabrozzi'a The Handbook of Stable Value Investments in the section on Legal Forms & Strcutures says "GICs are issued by life insurance companies and are typically formatted as group annuity contrac...
by alex_686
Wed Jan 17, 2018 6:03 pm
Forum: Investing - Theory, News & General
Topic: Recent market gains
Replies: 18
Views: 1497

Re: Recent market gains

I would argue that stocks are not money isn’t correct. There is a difference between money, stocks, and value. Money is a special investment asset. It is liquid, fungible, and preserves value. Let me give you a slightly flawed analogy. First, lets say we have a property that we rent out. Each month...
by alex_686
Wed Jan 17, 2018 5:32 pm
Forum: Investing - Theory, News & General
Topic: Recent market gains
Replies: 18
Views: 1497

Re: Recent market gains

The "value" of the market is the price the last buyer was willing to pay for each of the last individual shares traded on that market times the total number of each of the shares outstanding. To extend on this a little bit, this means there is a disconnect between money flows into the market and th...
by alex_686
Wed Jan 17, 2018 5:16 pm
Forum: Investing - Help with Personal Investments
Topic: Is a Stable Value fund just a Variable Annuity?
Replies: 25
Views: 1493

Re: Is a Stable Value fund just a Variable Annuity?

It's probably not better. Stable-value funds have the advantage of a, well, stable principal amount. Some thoughts on this. It is lower risk in the sense that there is no downside to it. On the flip side there is no upside either. Rates are locked in. Second, as Earl Lemograb notes, a stable value ...
by alex_686
Tue Jan 16, 2018 4:10 pm
Forum: Investing - Theory, News & General
Topic: Sell bonds during a market correction to buy cheaper equities?
Replies: 18
Views: 1741

Re: Sell bonds during a market correction to buy cheaper equities?

Why then are people sitting on the sidelines with cash waiting for a "deal" to come by? People think that they can time the market. That is, the average person thinks that they are smarter than the market which - by definition - reflects the average person's thinking. Theory suggests that this is h...
by alex_686
Tue Jan 16, 2018 3:52 pm
Forum: Investing - Theory, News & General
Topic: Sell bonds during a market correction to buy cheaper equities?
Replies: 18
Views: 1741

Re: Sell bonds during a market correction to buy cheaper equities?

Strictly speaking, the answer is no. Your question kind of implies that one can tell that there has been a market correction and that you can time it. A market correction is usually defined as: A correction is a reverse movement, usually negative, of at least 10% in a stock, bond, commodity or inde...
by alex_686
Tue Jan 16, 2018 2:43 pm
Forum: Investing - Theory, News & General
Topic: Sell bonds during a market correction to buy cheaper equities?
Replies: 18
Views: 1741

Re: Sell bonds during a market correction to buy cheaper equities?

Question: Would it make sense to sell some of your bonds or bond fund holdings during a market correction to capitalize on cheaper equities? Welcome to the forum. Strictly speaking, the answer is no. Your question kind of implies that one can tell that there has been a market correction and that yo...
by alex_686
Mon Jan 15, 2018 6:13 pm
Forum: Investing - Help with Personal Investments
Topic: Inheritance
Replies: 3
Views: 700

Re: Inheritance

This question should not be asked in isolation. What you want to do is look at your entire portfolio and figure out what your Asset Allocation should be. i.e., what percent stocks, what percent bonds. Treat your mortgage as a negative bond. In a more general way the question is about leverage and ri...
by alex_686
Mon Jan 15, 2018 3:22 pm
Forum: Investing - Help with Personal Investments
Topic: If i open a new ira w wife will i get tax benefits from old investments?
Replies: 3
Views: 194

Re: If i open a new ira w wife will i get tax benefits from old investments?

I am not quite following.

Are you talking about adding new money to a IRA? then the answer is yes.

Are you talking about rolling over funds from the old 401k to a IRA? No. It is just a rollover, from a pre-tax advantaged account to another pre-tax advantage account.
by alex_686
Mon Jan 15, 2018 2:35 pm
Forum: Investing - Theory, News & General
Topic: Can the Schiller P/E ratio be used for tactical allocation?
Replies: 13
Views: 684

Re: Can the Schiller P/E ratio be used for tactical allocation?

No to Maybe. First, every study that I have seen comes to the conclusion that Schiller does not provided any statistical meaningful information if the market is over / under valued. What it can do is predict what the long term rate of return will be. Second, the problem with the P/E ratio is that it...
by alex_686
Mon Jan 15, 2018 10:23 am
Forum: Investing - Theory, News & General
Topic: Funds and prospectus benchmarks.
Replies: 8
Views: 524

Re: Funds and prospectus benchmarks.

Yes I did see that. Is it fair to compare the fund with dividends reinvested to an index without dividends. When I check vanguard, the comparison seems to be more apples to apples. Or am I misreading this? The wording is poor, but I would assume the performance of both the fund and the index are wi...
by alex_686
Sun Jan 14, 2018 8:59 am
Forum: Investing - Theory, News & General
Topic: Funds and prospectus benchmarks.
Replies: 8
Views: 524

Re: Funds and prospectus benchmarks.

jackal wrote:
Sun Jan 14, 2018 12:04 am
That is where I am checking out the prospectus. Can’t see how the returns are being calculated for the fund vs. the index.
If you check out the fact sheet, immediately under the return presentation it states that the fund's returns are after expenses and dividends are reinvested. Does this help?
by alex_686
Sat Jan 13, 2018 4:00 pm
Forum: Investing - Help with Personal Investments
Topic: VSMGX and VNQ Portfolio
Replies: 3
Views: 323

Re: VSMGX and VNQ Portfolio

I am for overweighing REITs, but this is a topic of debate. I would sorta of agree with the OP - real estate is not propereraly represented in the market basket and REITs are a o.k. proxy. However, I would only do it in a tax advantaged space.
by alex_686
Sat Jan 13, 2018 8:06 am
Forum: Investing - Theory, News & General
Topic: Funds and prospectus benchmarks.
Replies: 8
Views: 524

Re: Funds and prospectus benchmarks.

So do the net returns not have any dividends whatsoever? (The question was why some benchmarks are gross and others are net dividends) In this context, MSCI Net returns are the returns after foreign withholding tax. It can be presented either as a price return or a total return (dividends reinveste...
by alex_686
Fri Jan 12, 2018 5:59 pm
Forum: Personal Consumer Issues
Topic: AirBnB my Van?
Replies: 29
Views: 2590

Re: AirBnB my Van?

DavidHutton wrote:
Fri Jan 12, 2018 5:53 pm
I think that I read that someone in New York or one of the boroughs was doing that.
I would put my money on Minneapolis during the Superbowl. It might be a bit chilly in February but some are well heated / insulated.
by alex_686
Fri Jan 12, 2018 5:45 pm
Forum: Investing - Help with Personal Investments
Topic: Do bonds generally go up when the stock market crashes?
Replies: 27
Views: 1501

Re: Do bonds generally go up when the stock market crashes?

There is a low positive correlation between stock and bond returns -around .4 to .6 depending on which time period you use. I wouldn't call a correlation of .4 to .6 low; it's really pretty large. Definitely large enough to base a decision on if it is true. 2 things. First, there is context. It ter...
by alex_686
Fri Jan 12, 2018 5:08 pm
Forum: Investing - Theory, News & General
Topic: Funds and prospectus benchmarks.
Replies: 8
Views: 524

Re: Funds and prospectus benchmarks.

Part of it is what the portfolio manager wants to be bench-marked against. If your universe of expertise is US domestic stocks - large and small - then you chose the Russell 3000. If international, then something MSCI. Sometimes the portfolio manager hews closely to the index they have chosen, somet...
by alex_686
Fri Jan 12, 2018 4:50 pm
Forum: Investing - Help with Personal Investments
Topic: question about VBTLX
Replies: 27
Views: 1564

Re: question about VBTLX

saltycaper wrote:
Fri Jan 12, 2018 4:22 pm
Also, contrary to popular commentary here, just because the "consensus" is 3 or 4 hikes, that does not mean the number of hikes that actually will occur are "priced in." There are probabilistic and time elements here that are not considered.
What elements are you talking about?
by alex_686
Fri Jan 12, 2018 4:47 pm
Forum: Investing - Help with Personal Investments
Topic: Do bonds generally go up when the stock market crashes?
Replies: 27
Views: 1501

Re: Do bonds generally go up when the stock market crashes?

There is a low positive correlation between stock and bond returns -around .4 to .6 depending on which time period you use. There is also a causal effect between bonds and stocks. A stock's value is its discounted Free Cash Flow to Equity (FCFE). When yields go down (i.e. bond prices go up), the dis...
by alex_686
Fri Jan 12, 2018 4:30 pm
Forum: Personal Consumer Issues
Topic: [Lightning rods for my house? Or too "old fashioned"?
Replies: 32
Views: 1961

Re: [Lightning rods for my house? Or too "old fashioned"?

Informative and funny and mostly on topic: https://what-if.xkcd.com/16/ How dangerous is it, really, to be in a pool during a thunderstorm? —Jay Gengelbach What would happen if you were taking a shower when you were struck by lightning? Or standing under a waterfall? —same3chords What would happen i...
by alex_686
Fri Jan 12, 2018 4:07 pm
Forum: Investing - Help with Personal Investments
Topic: question about VBTLX
Replies: 27
Views: 1564

Re: question about VBTLX

First, I think Jalbert was referring to equity index funds. Equities have favorable tax treatment of dividends. The exception is REITs. Actually, what is even more favorable is the long term capital gains tax rate. This favors equities over bonds. Question - what is the timespan for change in yield ...
by alex_686
Fri Jan 12, 2018 11:26 am
Forum: Personal Finance (Not Investing)
Topic: Hello question [HELOC payoff question]
Replies: 5
Views: 306

Re: Hello question

This is almost not a financial question. We could talk about the fees for getting a fixed rate mortgage verse the slightly higher interest you are paying on a HELOC. However, the main thrust of your post is about moving from a cheaper house to a more expensive house. There are fees from selling your...
by alex_686
Thu Jan 11, 2018 3:02 pm
Forum: Forum Issues and Administration
Topic: [New forum request] International investing and US non-resident section
Replies: 23
Views: 2085

Re: EU investing

No. As a practical matter there is no such thing as EU investing. There is Portuguese investing, French investing, German investing, Greek investing ... . Some of these have things in common. Some of them have as darn near as much in common with US investing as they do with each other. OK - I kind ...
by alex_686
Thu Jan 11, 2018 1:12 pm
Forum: Investing - Theory, News & General
Topic: Accelerated Bookbuild - who's informed and when? And what are the consequences?
Replies: 21
Views: 1067

Re: Accelerated Bookbuild - who's informed and when? And what are the consequences?

I am a little bit surprised that company principles can sell significant assets without filing a 10K. But I am just a zooplankton myself. That is why I no longer invest in individual small-cap stocks, I use index funds exclusively. I think Lauretta is investing in European small cap stocks. If so, ...
by alex_686
Wed Jan 10, 2018 4:56 pm
Forum: Investing - Help with Personal Investments
Topic: question about VBTLX
Replies: 27
Views: 1564

Re: question about VBTLX

so to my second question.. the Fed is planning 3 or 4 .25 basis point hikes during this year. How would that affect this fund. I read a bit about it and noticed that the current yield is 2.6% and duration is 5.6 yrs so a .25 basis upward change in rates would reduce the NAV by 5.6 x .25 = 1.4%? If ...
by alex_686
Wed Jan 10, 2018 3:33 pm
Forum: Investing - Theory, News & General
Topic: If I have a million with Edward Jones, in 10 years, how much money has my FA made off me?
Replies: 48
Views: 6284

Re: If I have a million with Edward Jones, in 10 years, how much money has my FA made off me?

You misunderstand. Brokerage Firm A - customer holds individual securities (Dow 30 equities) valued at $100,000. The 150% margin balance only applies if the OP's mother is borrowing against her own portfolio value. It has been 10 years but this used to be my day job. This is not how it works. The c...
by alex_686
Wed Jan 10, 2018 3:08 pm
Forum: Investing - Theory, News & General
Topic: If I have a million with Edward Jones, in 10 years, how much money has my FA made off me?
Replies: 48
Views: 6284

Re: If I have a million with Edward Jones, in 10 years, how much money has my FA made off me?

As far as your mothers account only costing $11K - that is what you calculate, however many of these brokerage accounts holding securities are frequently lent out via securities lending arrangement to outside parties unbeknown to the person holding the account. I doubt this. For individual accounts...
by alex_686
Wed Jan 10, 2018 3:02 pm
Forum: Investing - Theory, News & General
Topic: If I have a million with Edward Jones, in 10 years, how much money has my FA made off me?
Replies: 48
Views: 6284

Re: If I have a million with Edward Jones, in 10 years, how much money has my FA made off me?

I was surprised to find that my mom is only paying about $11,000 in fees on her $3M portfolio with EJ, which is comprised mostly of fund expense ratios (some of which are VERY high) ... To extend on this a bit, EJ would get the trailing 12b-1 fees, which are disclosed and are part of the expense ra...
by alex_686
Wed Jan 10, 2018 2:08 pm
Forum: Investing - Theory, News & General
Topic: Why bother with corporate bond funds instead of just U.S. Treasuries + Stock Index Fund/ETF?
Replies: 16
Views: 805

Re: Why bother with corporate bond funds instead of just U.S. Treasuries + Stock Index Fund/ETF?

Cost is low, control is a illusion according to behavioral economics, and all of my bonds are in tax advantage space. So I would push those objections to one side. That leaves us with 2 questions. Does the credit risk of bonds compensate for risk? How correlated is credit risk with Equity Risk Premi...
by alex_686
Wed Jan 10, 2018 1:59 pm
Forum: Investing - Theory, News & General
Topic: Accelerated Bookbuild - who's informed and when? And what are the consequences?
Replies: 21
Views: 1067

Re: Accelerated Bookbuild - who's informed and when? And what are the consequences?

FYI, in the US this would be very illegal. Insiders, which would included anybody who owns more than 5%, has to register their intent with the SEC prior to any action and this is published on EDGER, SEC's database. Plus, often one has to hand off the exact timing of the trade to a 3rd party. There a...
by alex_686
Tue Jan 09, 2018 3:16 pm
Forum: Investing - Help with Personal Investments
Topic: target date fund with cash instead of bonds
Replies: 8
Views: 724

Re: target date fund with cash instead of bonds

I was just reading a Kitces article on another subject and he referred to T-Bills as cash. Perhaps your site is also counting T-Bills as cash, whereas other sites like Morningstar or State Street are listing them as bonds. I don't think this is the answer. I can't think of anybody who does not coun...
by alex_686
Tue Jan 09, 2018 1:17 pm
Forum: Investing - Help with Personal Investments
Topic: Portfolio Q: Bonds vs. CDs or other alternatives
Replies: 1
Views: 208

Re: Portfolio Q: Bonds vs. CDs or other alternatives

1. Expected rate hikes are already baked in. VBTLX has a SEC yield of 2.6%, Ally's 11 month is at 1.6%. So why? Yes, VBTLX has a higher risk duration but since you are in a retirement account I would assume your investment horizon is long enough to take this type of risk. TIPS are even safer but hav...
by alex_686
Tue Jan 09, 2018 10:12 am
Forum: Investing - Help with Personal Investments
Topic: Maybe not a win for teachers/I need some advice
Replies: 46
Views: 2734

Re: Maybe not a win for teachers/I need some advice

I would start off with asking what Aspire does. Then maybe ask what they are charging. Off hand I would guess that they were handling the administrative end of running the plan. Somebody has to do it, there are expenses associated with it, so it may not be inherently evil.
by alex_686
Mon Jan 08, 2018 1:05 pm
Forum: Investing - Theory, News & General
Topic: Living on Dividends and Interest
Replies: 19
Views: 2589

Re: Living on Dividends and Interest

It would be incorrect. One should focus on the "Total Return" of the portfolio and just not focus on one narrow area of return. I understand the appeal but the problem with this approach is that it is a intellectual shortcut. There are 2 problems here. First, it tends to be overall conservative. Pro...
by alex_686
Sun Jan 07, 2018 11:25 pm
Forum: Investing - Theory, News & General
Topic: Ratio of USA stocks to closely approximate a "Total World Stock Index" using only two Fidelity funds (TSM & TISM)
Replies: 4
Views: 353

Re: Ratio of USA stocks to closely approximate a "Total World Stock Index" using only two Fidelity funds (TSM & TISM)

Yes, you are correct.

You can ignore the 80% comment. It is legal boilerplate. To be a index fund the fund must invest 80% in the index. It is the legally minimum requirement so the lawyers stick it in there in.
by alex_686
Sun Jan 07, 2018 12:05 pm
Forum: Investing - Theory, News & General
Topic: Does the S&P 500 Grow Faster Than the Economy?
Replies: 31
Views: 2906

Re: Does the S&P 500 Grow Faster Than the Economy?

6.3% is not the market's growth rate. The market cannot reinvest dividends. The market already owns all the shares of every company's stock. I will second this. It might be useful to look at the returns of prefered stockks. They too have outpaced thhe economy and have zero growth. It might also be ...
by alex_686
Sun Jan 07, 2018 9:24 am
Forum: Investing - Theory, News & General
Topic: Lowering my risk profile (AA or options)
Replies: 2
Views: 247

Re: Lowering my risk profile (AA or options)

Historically there is not much differfence in thhe 3 strategies. Writing calls does deliver higher returns over the past 40 years or so. The problem here is tail events - big sudden down movements. So it is hard to tell if the risk adjusted return will actually be better. I would go with option #1. ...
by alex_686
Fri Jan 05, 2018 9:17 pm
Forum: Investing - Help with Personal Investments
Topic: pension contributions in your overall asset allocation
Replies: 15
Views: 796

Re: pension contributions in your overall asset allocation

My pension plan has no cash value. It becomes "income" only after it begins paying. Income is a cash flow, cash flow has a NPV, ergo it has a cash value. Probability of vestment, bankruptcy of the entity, and finial cash values are variable so modeling its cash value is hard. Just because it is har...
by alex_686
Fri Jan 05, 2018 8:42 pm
Forum: Investing - Help with Personal Investments
Topic: Financial field position and qualification
Replies: 3
Views: 419

Re: Financial field position and qualification

No qualifications per se.

SQL and programming languages will get you in the door but these are just tools. Math, logic, economics and accounting are key skills. Drive and emotional control are also key sills.
by alex_686
Fri Jan 05, 2018 8:30 pm
Forum: Investing - Theory, News & General
Topic: Evaluation principle for non-dividend paying stock
Replies: 5
Views: 304

Re: Evaluation principle for non-dividend paying stock

One can substitute earnings for dividends. It is not prefect but it does have predictive powers. Or one can use a multiple of earnings. Or book, sales, or whatever. Another choice is a spreadsheet model but that is a custom built it out of your own assumptions type of model.
by alex_686
Fri Jan 05, 2018 8:14 pm
Forum: Investing - Help with Personal Investments
Topic: pension contributions in your overall asset allocation
Replies: 15
Views: 796

Re: pension contributions in your overall asset allocation

Pensions, Social Security, and the like are consider "bond like" assets. Ideally you would be able to figure out the Net Present Value (NPV) of your pension to figure out your asset allocation. This can be tricky. Pensions do allow you to be more aggressive in the other investment accounts.